High Tech hyping the “recovery”?

The wave of good news has already restarted the hype machine, for which the IT industry is well known. Once again, the sector is being trumpeted as the savior of the economy. Some even predict that IT will pull the economy out of recession, with investment in technology giving a swift boost to productivity and job creation.

Just how much of a boost IT can provide is a subject of some contention. Both Forrester and Gartner, the industry’s leading research firms … predict that demand will rebound next year. But .. they differ on the severity of the recession in IT and, more importantly, the speed at which the industry will pull out of its slump.

Excellent results at Apple, Google and even Intel reflect increased demand from consumers … But companies still account for by far the biggest chunk of technology spending. IBM … is therefore a much better proxy for the overall health of the IT industry. Although its profits were better than expected,its revenues fell by nearly 7% compared with the third quarter of last year.

Perhaps it is a result of the severity of the recession, but many are reacting to the first signs of an IT recovery as if it were the latest great thing. As with many new technologies, they overestimate the short-term impact, but underestimate what will happen in the longer run.